Gifting rules and inheritance tax

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Only one in four people making financial gifts are aware of the risks of inheritance tax (IHT), highlighting the threat of unexpected tax bills for gifters for non-compliance.

Gifts valued at less than £250 individually, totalling less than £3,000 per year, or to help with certain people’s living costs are exempt from IHT. Most other gifts made by an individual, to another individual, during their lifetime, will also be exempt from IHT unless the donor dies within seven years of making the gift. Such gifts are known as potentially exempt transfers.